Indian Army ex-chief wasn’t surprised when Dassault junked HAL as Rafale offsets partner

Former Indian Army chief General Ved Prakash Malik (Retd) said Saturday he wasn’t surprised by reports that French aerospace manufacturer Dassault had rejected Hindustan Aeronautics Limited (HAL) as an offsets partner over quality concerns.

General Malik, who headed the Indian Army during the Kargil war, was speaking in a panel discussion on ‘Military Industrial Base and Make in India’ on the second day of the Punjab government’s Military Literature Festival in Chandigarh.

The rejection of HAL as an offsets partner in the deal India has signed with France for the purchase of Dassault’s Rafale fighter jets has become a hot potato in Indian politics. The opposition has alleged foul play, questioning Dassault’s selection of Anil Ambani’s Reliance Defence as the partner over a state-owned manufacturer.

A former HAL chief, too, had lashed out at allegations of the agency’s incompetence to be a partner in the Rafale deal.

“I’m not surprised that Rafale [sic] recently refused to accept quality assurance from HAL,” General Malik said, citing other instances he believed the Make in India programme had made little progress so far, especially in the defence sector.

‘Hardly any money’ ::

One of the biggest stumbling blocks in the programme, aside from defence procurement procedures, he said, was that manufacturers were not getting any indication that the government was interested in developing and buying equipment for its own armed forces.

Recalling a conversation with a manufacturer after the last Budget, he added, “There was hardly any money left for capital purchases.”

The “upset manufacturer”, Malik said, feared that meagre budget set aside for defence meant he won’t get any orders, despite having invested a lot of money in the sector.

The absence of political will was another reason why defence manufacturing had never picked up in India, he added.

Malik said he had once suggested to former President Pranab Mukherjee, who has earlier served as defence minister, that disinvestment of some ordnance factories may yield money to upgrade the rest.

Mukherjee, he added, refused the suggestion, stating that the political leadership could not alienate the workers of ordnance factories.

“I feel there is a very strong nexus between the ministry of defence, between the defence PSUs, including the ordnance factories, the Defence Research & Development Organisation, and others, and that nexus is not giving a level-playing field to private manufacturers,” Malik said.

Drawing from his experience in the battleground, General Malik said he had suffered during the Kargil war when India was running out of ammunition.

‘A reminder’ ::

He said such crises were a reminder to build adequate manufacturing capacity, for which, he added, the government has to spend money and also give a level playing field to private manufacturers.

Another panelist, Brigadier K.A. Hai (Retd), said India had misused its defence offsets policy, which was introduced to encourage domestic manufacturing.

“We have not been able to get major technologies in our country through offsets,” Brigadier Hai added.

“What we succeeded in doing was to get some questionable manufacturing that can be done in small-scale or medium-scale industries,” he added.

“We have got to see how we can make a win-win situation to ensure that we get first-class technologies through offsets,” Hai said.

Journalist and former Army man Col Ajai Shukla, also a panelist, said the Indian government needed to understand that it had to guide and support the domestic defence industry with policies, orders and the requisite regulatory framework.

“The defence ministry clearly has a problem switching over from public sector defence industry to private [players], which is clearly the way forward,” he added.

There are gaps the government needed to bridge to have a robust defence industry, he said, including providing the private sector with infrastructure and the right ecosystem to prosper.

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